Takeda suffers a big blow to its diabetes pipeline with PhIII failure of TAK-875

Takeda has suffered a major setback in its quest to fill the blockbuster gap left by last year's loss of patent protection for the diabetes drug, Actos. The pharma company reported that it was forced to scrap its late-stage program for the pioneering GPR40 agonist TAK-875, or fasiglifam, after trial monitors picked up clear signs of liver toxicity in patients.

"After careful consideration of the data emerging from all the clinical trials and in consultation with these panels, the company has reached the conclusion that, on balance, the benefits of treating patients with fasiglifam (TAK-875) do not outweigh the potential risks," the company reported in a statement.

Clinicaltrials.gov listed a total of 10 ongoing studies for TAK-875.

Takeda's top executives had frequently pointed to TAK-875 as one of their best shots at coming up with an important new approach to treating diabetes. The drug is designed to spur insulin secretion in the pancreas and Takeda had confidently projected an approval in Japan in 2015 with a follow-up approval in the big U.S. market a year or two later.

The termination of the high-profile program caused some anxiety among investors. Takeda's shares plunged 8% on the loss as analysts wondered how the pharma company could counter the loss of Actos, a $3.7 billion drug that accounted for about a quarter of its revenue in 2011.

Takeda won an approval on a trio of DPP-4 diabetes drugs--Nesina (alogliptin) and two combos with alogliptin, dubbed Oseni and Kazano--at the beginning of the year. But Takeda suffered some big delays in gaining acceptance, a common fate in this field, where regulators are particularly cautious about new drugs. And Merck ($MRK) had already solidified its lead in the DPP-4 market with Januvia while Onglyza trailed closely behind it. Takeda had hoped that a combination of TAK-875 and Januvia could help regain some lost market territory--but that dream has clearly vanished as well.

- here's the release